Google, Facebook, Amazon: The plan against the three almighties The new constitution for the Internet

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The big tech era seems to be coming to an end.

Fear of the power of tech companies has been growing around the globe for a long time and Corona has intensified these worries again.

Politicians are also reacting.

In the US, 48 of the 50 states want to jointly force Facebook to sell WhatsApp and Instagram.

The Chinese government wants to control domestic tech giants like Tencent and Alibaba more tightly.

And in Brussels, the EU Commission is currently putting the finishing touches on new rules for digital corporations, which are historically unique in their severity.

On Tuesday, EU Industry Commissioner Thierry Breton and Margrethe Vestager, Vice President of the EU Commission responsible for digital, will present the new rules.

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They are summarized in two laws: The Digital Services Act (DAS), the future constitution for all Internet companies in Europe, and the Digital Markets Act (DMA), which is explicitly written to break the market power of the tech giants.

“We cannot blame the internet companies for misbehaving,” Commissioner Breton recently told a small group of journalists.

"We don't have the right rules to dictate the correct behavior."

That should change now.

So far, only early drafts of parts of the overall package have circulated in Brussels; conversations that WELT had with people who are familiar with the legislative process, but paint a clear picture of the rules.

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Accordingly, the Digital Markets Act (DMA) provides for special obligations for so-called gatekeepers, digital lock keepers: This means companies that dominate individual markets so strongly that consumers and smaller companies cannot ignore them.

Google should not link data from Youtube and Maps

Marketplaces like Amazon, app stores like Apple, search engines like Google, cloud services like AWS and social networks like Facebook would be included.

These companies are not explicitly named in the regulations.

According to information from WELT, criteria for gatekeepers should be listed there.

This should include the size of the company, the extent of its activities in Europe, the number of business customers, the financial importance of the company and the extent of its activities across several sectors - for example, whether it operates a social network like Facebook and a messaging service like Whatsapp.

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Certain behavior should be forbidden for these dominant companies in the future: For example, they should no longer prevent consumers from deleting pre-installed software or apps from smartphones or other devices.

They should also be prohibited from merging the data of different services in order to create profiles of users.

Google would then not be able to link data from Youtube or Google Maps.

If you do that

If the tech giants violate these requirements, they face severe sanctions.

Apparently, the draft law provides for penalties of up to a double-digit percentage of global sales.

This is about huge sums of money: Amazon, for example, made 280 billion dollars in sales worldwide last year.

If the dominant players violate these rules several times, there is a risk of even more drastic cuts.

The companies concerned or parts of their services could be excluded from the internal market or they could be forcibly broken up in Europe.

In addition, the gatekeepers must in future always inform the EU Commission if they buy another company in a relevant market, even if it is only a small purchase.

These companies are then also under closer scrutiny.

Under the current competition rules, companies only need to approve large purchases.

Stop illegal content, fake news and hate speech

In fact, the new rules are an admission that the previous competition policy has not managed to prevent the digital quasi-monopoly.

The proceedings took years, but could only intervene retrospectively when the market distortions had already established themselves and, despite high fines, were of little use.

The new rules, however, should apply immediately;

the previous competition law will also continue to exist.

A second set of rules, the DSA, should apply to all digital companies and define what should be allowed online in the future.

This is intended, for example, to prevent the spread of illegal content, fake news and hate speech.

WELT has a current draft.

The Digital Services Act, the English-language name for this Digital Basic Law, is only intended to define a basic framework of requirements, for example that companies should work together with national regulators or that large platforms must disclose their algorithms to supervisors.

In the future, specific laws and requirements will be based on this, for example to combat terrorism, child pornography, hate speech or fake news.

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This new constitution for the Internet is urgently needed: Currently, a law from 2000 regulates the work of digital companies.

Facebook, YouTube or WhatsApp didn't even exist back then.

The principle that the EU Commission is following: the larger the company and the broader the business model, the higher the requirements should be.

Platforms that take on an intermediary role, such as Amazon or Ebay, are to be made more responsible.

In the future, you need to review the companies that want to offer goods or services through the platform.

The European Parliament praises this: “It is unacceptable that the toy shop around the corner has to comply with tougher rules than the big e-commerce companies;

therefore there must be clear and fair rules for everyone;

offline, and also online ”, says Andreas Schwab (CDU), the coordinator of the conservative EPP group in the Internal Market Committee.

The division of labor for control is viewed critically

If companies violate the regulations of the DSA, penalties of up to six percent of global sales are possible.

The regulations are apparently to be monitored by national supervisors, who are determined by the member states.

The commission is to coordinate their work at the European level.

This planned construct is a disappointment for many observers who relied on strong EU supervision.

With existing EU rules such as the General Data Protection Regulation, it depends a lot on how motivated the national supervisory authority is to enforce the rules.

For example, the Irish data protection officer is responsible for Facebook or Amazon's European headquarters are in Luxembourg.

"Both in terms of data protection and financial supervision, Ireland and Luxembourg seem to be trying to compensate for their dwindling tax advantages by cautiously prosecuting offenses," criticizes Moritz Körner, member of the FDP in the EU Parliament.

The new rules should avoid lax enforcement being used as a locational advantage.

In any case, it is unlikely that the rules will actually come in this strict form.

Because the member states and the EU Parliament must approve the plans.

They threaten to be watered down in the negotiations;

not least because the big tech companies are likely to lobby against it.

The tech giants defend themselves against the accusation of market dominance

The heads of the four technology giants Apple, Amazon, Facebook and Google are speaking in front of the US Congress on the allegation of market dominance and unfair competition.

The MPs have been following this up for a year - and are extremely critical.

Source: WELT / Nancy Lanzendörfer